GAO: Agency Failed To Identify Proposal Weaknesses In Discussions

A procuring agency failed to conduct meaningful discussions where it merely asked a contractor to clarify its understanding of a certain portion of the solicitation, rather than informing the contractor of specific proposal weaknesses relating to that same portion of the solicitation.

The GAO’s bid protest decision in Nexant, Inc., B-407708, B-407708.2 (Jan. 30, 2013) demonstrates that when an agency has identified specific weaknesses in a contractor’s proposal, discussions must be sufficiently detailed to enable the contractor to understand the agency’s concern and have the opportunity to improve its proposal.

The Nexant GAO bid protest involved a U.S. Agency for International Development procurement for services in connection with the establishment of a private financing advisory network in Asia, known as PFAN-Asia. The solicitation divided the requirements among five mandatory tasks and one optional task. According to USAID, optional task 6 could involve USAID missions from any country, and were not limited to the South Asian countries identified in a portion of the solicitation.

Nexant, Inc. submitted a proposal. USAID assigned Nexant’s initial proposal a weakness for failing to understand that optional Task 6 “is designed to support focused country-level PFAN activities in any country, not just countries in South Asia.” USAID also faulted Nexant for failing to “provide any creative ideas on leveraging sufficient resources to engage South Asia as part of the overall program rather than relying entirely on Optional Task 6 resources . . ..”

After reviewing initial proposals, USAID opened discussions with Nexant and other offerors in the competitive range. During discussions, USAID asked Nexant to address the following question: “[p]lease clarify Nexant’s overall understanding [of] Optional Task 6.” In response, Nexant explained that it would expand PFAN activities in up to four South Asian countries, should funding be available, and explained that the company already had a presence in three South Asian countries.

After receiving Nexant’s response, USAID continued to assign Nexant’s proposal a weakness, finding that Nexant did not understand that optional task 6 was not limited to South Asia. USAID made award to Deloitte Consulting, LLP at a slightly higher price than the price proposed by Nexant.

Nexant filed a GAO bid protest. Nexant alleged, in part, that USAID had engaged in misleading discussions by failing to identify the specific weaknesses the agency had identified in USAID’s proposal.

The GAO agreed, finding that “the agency’s discussion question in this area was misleading.” The GAO wrote that although USAID had identified two specific weaknesses in this area of Nexant’s proposal, “[t]o the extent the agency’s discussion question focused on either of these two areas of of concern, it was limited to directing Nexant’s attention–obliquely–to the first concern, namely, Nexant’s apparent misunderstanding of the geographical scope of optional task 6.”

The GAO continued, “[w]e agree with the protester, however, that the discussion question did not adequately convey to Nexant the nature of the first concern because the protester was asked, without elaboration, to clarify its understanding of optional task 6, and was never advised of its apparent misunderstanding of the geographic scope of optional task 6.”

The GAO also found that the discussion question “entirely failed” to advise Nexant of USAID’s second concern, regarding Nexant’s apparent failure to provide creative ideas for leveraging resources and partnerships. “Nexant therefore improperly was deprived of the opportunity to improve its proposal in this area,” the GAO wrote. The GAO sustained Nexant’s protest.

The Nexant GAO bid protest demonstrates that when an agency engages in discussions, it must provide a contractor with sufficient information about identified proposal weaknesses to enable the contractor to understand the agency’s concern and have an opportunity to improve its proposal. Although every case is unique, contractors should take note of Nexant if a discussion question, in retrospect, seems far too vague–or omits an identified weakness altogether.

Hi – I have read the article and anxious to know what is the final result of this protest. Is USAID still award the PFAN-Asia project to Deloitte or whether the protest remain sustained? Your update would be very much appreciated.

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